Martin A. Siegel, 42, was sentenced to two months in prison Friday, 3 1/2 years after the former head of mergers and acquisitions at Kidder Peabody & Co. pleaded guilty to insider trading and tax evasion.
In the hot takeover climate of the mid-1980s, Siegel was a legendary takeover defense specialist, rescuing companies from raiders such as Ivan F. Boesky. But, as he said in his February 1987 plea, Siegel had been paid more than $700,000 by Boesky for confidential information.
Siegel also implicated Robert Freeman, the former head of arbitrage at Goldman Sachs & Co., in a conspiracy to share illegal inside information. Freeman received a four-month sentence and was fined $1 million in April on his insider trading conviction.
Federal Judge Robert J. Ward said Siegel`s sentencing would have been stiffer had it been imposed sooner. Siegel, who paid nearly $10 million to the Securities and Exchange Commission to settle civil charges, faced a maximum of 10 years.
”There is no excuse for what he did,” said Ward. But the judge said he was swayed by Siegel`s ”cooperation, contrition and candor in difficult circumstances. He owed a substantial debt. He has reduced that debt by what he has done.”
Siegel, his voice wavering, told the packed courtroom: ”I`ve been as diligent as I could to try to do everything in my power to make up for my mistakes and to be of service to the community.”
Assistant U.S. Atty. Neil Cartusciello, though citing Siegel`s actions as ”serious, wrong and criminal” committed for ”crass motives,” lauded his cooperation.
What Siegel revealed to prosecutors ”was not pre-announcement tipping”
of a takeover, but ”mid-deal information that is much harder to detect”
because it can be lost in the ”din of rumors, news stories and announcements,” Cartusciello said.
Siegel`s cooperation from the day he was subpoenaed by the SEC in late 1986 also helped the government`s case against Drexel Burnham Lambert.
